Are Bitcoins Safe?
20/02/2019
Are Bitcoins Safe?

Cryptocurrencies can be an excellent investment tool if the customer makes smart decisions and shows due diligence.

Many of the biggest cryptocurrencies these days have been on the market for more than a decade, but it is only in the last couple of years that they really entered the mainstream.

By the end of 2017, the cryptocurrency rush had reached new levels.

At its highest peak, Bitcoin's price rose to almost $20,000, and an incredible number of investors decided to grab their share of the pie as a result. In the months that followed, interest in cryptocurrencies continued to grow despite the fall in their prices, and investment stories began to raise many questions, questioning the legitimacy of cryptocurrencies.

The obvious volatility of cryptocurrency even in short periods of time inevitably raises questions concerning their reliability as a means of investment. At the same time, large-scale hacking and fraud activity is a concern for the security of this class of assets in general.

Cryptocurrencies are finding many uses with criminal activities, such as money laundering.

Many believe that cryptocurrencies provide them with sufficient enough anonymity that they can avoid using ordinary fiat currency and bank accounts.

When it comes to Bitcoin, a record of every transaction is kept in a special ledger located on the blockchain, which cannot be edited.

When laundering, complex money flow routes are often used to hide the money's origin.

With cryptocurrencies, this is not possible, since the routes that the funds travel by are recorded and can be tracked.

How reliable is Bitcoin?

Until recently, the fact that cryptocurrencies lacked official regulation scared away many potential investors.

However, nowadays there are numerous large funds and banks that recognize cryptocurrencies as a legitimate asset and work with them. Before that, various financial institutions and cryptocurrencies adhered to the policies of the Financial Conduct Authority (FCA).

This involved evaluating customers to prevent them from using cryptocurrencies for money laundering. The primary method for disclosing illegal action is based on investigations against owners of the receiving accounts.

This type of self-regulation was legalized by the European Commission, which introduced the EU Anti-Money Laundering Directive (AML) in 2018. It states that all cryptocurrencies and their investors are subject to regulation from the point of view of AML. This is an important step towards broad and comprehensive regulation, which is designed to increase the security and legitimacy of cryptocurrencies.

The cryptocurrency community continues to show enthusiasm and support for these assets, no matter the condition on the market.

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Are bitcoins safe to invest in?

If there is one things we learned in the past few years, it's that digital currencies are here to stay, hence, it is very important to get rid of the misconceptions associated with their use.

Only then will they become truly safe.

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